I had this same issue a year ago with a 2000 LC. Bad windshield install lead to a ton of rust under the gasket around the windshield frame. I had repaired the rear hatch about six years earlier, knew it was temporary, and it was coming back...quickly, and badly. Then found rust on the front inside of both rear wheel wells. 214K miles. Mechanically perfect. I had deferred doing the TB and WP service, while I debated keeping it. In the meantime both the climate control and stereo head units died, from water leaks. My short term solution on the roof rust was Gorilla Tape to cover it....as grinding with a Dremel would have punched through. During this 2-3 month time period, I went back and forth about what to do. Sourced a tailgate for $800, and was about to buy it. Then I really spent some time with the truck, and with pad of paper. It really needed a new exhaust,and done right, everything from the manifolds back. I was looking at at least two new calipers, plus rotors and pads. It was about due for new tires. Basically, though, it was a rust bucket. Maybe emerging as the worst 2000 that I had seen. I had owned it since new, and had driven it all over the country with my wife, and both kids at various times. Keeping it wasn't a logical move.
I sold it in 15 minutes on Craigslist for $5K, with 100% full disclosure, to a guy who was going to part it out. Runs a body shop.
I then bought a beautiful, near mint 2003 with 92K miles in Denver. Had it very thoroughly inspected by a knowledgable friend....my son. Then had Christo Slee do the TB and related 90K service, and a pretty extensive baseline list of work for me, before flying on to pick it up. Had a rust proofing treatment, Corrosion Free, done just as soon as I arrived back in NE. I've had great luck with it. among other cars we have a 2002 Subie VDC Outback that looks almost new underneath. You redo it every year...I do it every six months.
I would have much preferred to have a 2000 that I drove to 350K+. The rust wasn't a problem until it leaked all around the windshield frame, and until I was told that replacing a newly cracked windshield was going to take a huge amount of cutting, welding and painting. Thousands.
So I bit the bullet, and bought exactly what I wanted. One owner car, private sale, very thorough maintenance history, originally from New Mexico. Never offroaded. Paid more than I would have for many 2005's and 2006's.....but I've very happy with it. Love it. It will need a new windshield soon {a bunch of nicks.....original glass, and western car}, and you can bet that this one will be done right, and done with factory OEM glass.
If yours doesn't leak, I'd just think about driving it. Once that rust leads to leaks, move on. If you think you can sell it for $8K, being honest with a buyer, I'd be hard pressed not to sell it, though, now. And, ah.....yep, you did say else where that you paid $500 for it. Maybe you'll get lucky again. Sounds like a big win, even as is.
My sister in law has had three Sequioas {all leased}. No LC, IMO. Just not a fan. Borrow one from your dealership's lot for a weekend.
Good luck. Just my $.02.